A new way of approaching FX risk

For most businesses, foreign exchange (FX) is an unwanted by-product of doing business overseas. At best it’s an ongoing concern; at worst it can seriously impact a company’s profitability and even viability.

Most companies manage FX risk in some fashion. However, few have the knowledge, expertise or time to create and manage a strategy that is effective and measurable.

Synops is an online risk management tool that can remove FX risk for businesses. It reduces the effects of market volatility, protecting companies from the unknown. The strategies are provided in an easy to use platform, freeing businesses to concentrate on core areas of their business.

The graph below illustrates how Synops layered hedging programmes can condense market range by up to 75%.

How Synops works

Synops takes a company’s foreign currency requirements in the form of a monthly forecast, and automatically generates trading plans that neutralise the risk that FX poses to the business.

The trading plans are generated by a series of tried and tested algorithms that are proven to reduce risk. Rather than relying on assumptions, instinct or emotion, Synops is based on mathematics and science. It works the same way every time, month in, month out.

The strategies employed here are not new. Historically they’ve only been used by large multinational companies, such as those trading on the FTSE 100.  Because of the mathematical complexity and the specialist knowledge required, companies generally have either not heard of them or consider them too complex to implement. This has meant that, up until now, there are not many alternatives to the standard approach to hedging.